Aperam: what impact?

(Boursier.com) — We open lost 1% again to 27.30 euros this Monday, while the Barclays broker remains ‘underweight’ on the stock, with an adjusted objective despite everything of 26 to 28 euros. Oddo BHF had previously raised its opinion on the stainless steel producer to ‘outperform’, while raising its target to 38 euros. The analyst explained that he had organized two days of roadshows in London and Amsterdam with Aperam’s financial director, Sudhakar Sivaji, following the publication of strong third quarter results and the announcement of the proposed acquisition of Universal Stainless, an American producer of specialty stainless steel primarily intended for aeronautics. While Aperam remains widely perceived by investors as dependent on the European macroeconomythe broker’s discussions with management highlighted the merits of integration across the value chain and increasing exposure to high-value products and faster-growing regions.

The analyst was more cautious in his approach due to Aperam’s high exposure to Europe and its lesser exposure to the United States compared to Acerinox and Outokumpu. This last point was resolved by the acquisition of Universal. More importantly, despite the rather gloomy European context and relatively unfavorable stainless steel prices globally, the broker believes that the additional growth drivers put in place by Aperam in recycling, distribution and alloys should contribute to generate solid and growing EBITDA, as reflected in the situation observed in Q3… Furthermore, the impact of falling rates to which the stainless steel sector is particularly exposed and a potential resolution of the political impasse in Germany with elections in early 2025 offer a case with attractive optionality. Finally, at 4.1x 2026 EBITDA (including Universal on an annual basis) and with a dividend yield of 7.3%, the valuation seems attractive compared to Acerinox (4.6x EBITDA and 7% yield ).

Morgan Stanley remained at ‘market weighting’ with an adjusted target of 32 euros, after the publication of results came out higher than expectations and its own forecasts, the group saying it was driven by a better product mix and development in Brazil. Among other brokers’ opinions, BNP Paribas Exane remains ‘outperform’ with a target adjusted to 32.50 euros.